The Ministry of Finance is considering scrapping the rubber export tax, with an aim to remove difficulties for companies amid falling latex prices and declining exports.
According to the Vietnam Rubber Association, the ministry issued a document earlier this week to invite opinions about cutting the rubber export tax to zero from the current 1 percent (applied on products coded HS 4001, 4002 and 4005) in response to the association's petition.
The rubber industry has been facing difficulties during the past few years due to oversupply in the global market and plummeting international prices, which hit the local farmers and companies hard.
Farmers in the central and southeastern provinces have reportedly cut down more rubber trees due to a significant fall in the natural rubber price. The price for a kilo of natural rubber latex decreased by half over last year's price to roughly 15,000 VND or 0.7 USD.
According to the statistics of the Ministry of Agriculture and Rural Development, in the first six months of this year, about 337,000 tonnes of rubber were shipped abroad, worth 644 million USD, 12 percent lower year-on-year.
The Vietnamese rubber prices declined between 2012 and June 2014 due to oversupply in the world market, according to thitruongcaosu.net website.
The average rubber export price in the first five months of this year fell by 29 percent year-on-year to 1,842 USD per tonne, 60 percent lower than the peak price in February 2011.
In the world market, rubber prices reportedly hit low levels in recent months over concerns of muted demand, oversupply and declining prices.
The Wall Street Journal, in an article published in May, reported that Thailand , the world's largest natural rubber producer, would start unloading its huge rubber stockpile estimated at 220,000 tonnes, leading to pressure on rubber prices.
The article also said that the stockpiles in major rubber consumers like China and Japan were also at high levels.